The value of cryptocurrencies is determined by supply and demand, just like anything else people want. If demand increases faster than supply, the price rises. For example, if there is a drought, the price of cereals and agricultural products increases if demand does not change. A popular method is known as trend lines.
This tries to ignore anomalies and extreme outliers in the price of a cryptocurrency to detect an upward trend when assets continue to reach new highs in price or lows, if prices fall for consecutive days. This, combined with analyzing the shape of candlestick charts, can help reveal whether a trend is likely to continue or come to an end, allowing traders to make weighted decisions about what their short-term strategy should be. If interest is maintained while supply is fixed, the price could rise. Be sure to consider the total supply and current circulation of any cryptocurrency before investing.
If a currency gains mass adoption, its value can skyrocket. This is because the total number of most cryptocurrencies is limited and an increase in demand leads to a direct increase in price. Inflation figures for June were higher than expected on Wednesday, heightening fears that the Federal Reserve will become more aggressive in its fight to control rising prices. However, there are some signs that it could be peaking.
If there are signs that the economy and inflation are being controlled, that could help the crypto market find its bottom, according to Vijay Ayyar, vice president of corporate and international development at cryptocurrency exchange Luno. Therefore, it's a good idea to keep abreast of as much cryptocurrency news as possible to ensure that you have a broader view.